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How can your company fill a gap in Indonesia’s construction material imports market?

 

Indonesia is currently in the midst of a building frenzy. A wealth of infrastructure and construction projects, enjoying billions of dollars’ worth of investment, are planned or underway. This means there is a huge demand for building materials of all sorts.
 
While domestic supply can cover some the volumes needed, Indonesia is still reliant on a number of vital building materials which can only be acquired through imports.
 
What are the key import stats?
 
Indonesia imported $78 billion worth of goods in 2014 (the most up to date data available at the time of writing), according to the Massachusetts Institute of Technology Observatory of Economic Complexity. Metals, stone, glass, wood and chemical products contributed $35 billion to this total – all categories vital for the construction industry. Overall machinery imports totalled $42.4 billion.
 
Indonesia’s major construction material imports
 
Cement is another material that is desperately needed to achieve Indonesia’s construction goals. While the country enjoys a domestic production capacity of over 68 million tons annually, it simply isn’t enough. 
According to BPS, Indonesia’s state statistics service, some 4 million tons of cement was imported from around the world in 2014, primarily from neighbouring South East Asia states. Vietnam leads the charge, with 173,000 tons shipped but a number of European nations, including France and the Netherlands exported significant cement volumes.
 
Indonesia is a major steel producer. However, domestic demand is outstripping supply. 2013 saw a need for 15 million tons – nearly double the 7 million ton capacity of local manufacturers. A genuine market opportunity for construction steel exporters is available. 
 
A total of 8.8 million tons of iron and steel tubes were imported in 2014, totalling close to $1.3 billion, and once more we can see major interest in foreign products stemming from Indonesia’s construction industry. 
Construction metals are sourced from a wide variety of producers including regional neighbours, such as Singapore and Malaysia, while Russia is a key European supplier with trade in metals reaching totals of over $200 million.
 
What about the interior finishings market?
 
Of course, it is not just structural building components Indonesia is in need of. Interior finishing materials are much in demand. Ceramics do form a significant part of Indonesia’s manufacturing make up. However, a growing consumer class is fuelling desire for a higher standard of product – particularly in the bathroom tiles sector. 
 
Import levels of ceramics remain comparatively low, at around $100 million, including glazed, refractory and bathroom varieties. But crucially, there remains a niche for exporters of fine European tiles and associated items on Indonesian markets. Expect desire to grow alongside a growth in personal purchasing power across Indonesia. 
 
Furnishings and fixtures too are in great demand. Chairs alone contributed to $299 million worth of total exports in 2014, with other furniture categories amounting to a further $241 million. Shining a revealing spotlight on light fixture import figures shows an appetite for quality building electronics in the Indonesian market. $248 million worth of lighting goods made their way to Indonesian shores in 2014.
 
Manufacturers of pre-fabricated structures will be pleased to note that Indonesia imports $100 million worth a year. A vast, quickly growing population has resulted in a major housing deficit – thus a captive market exists for all forms of pre-fabricated buildings.
 
A big demand for building machinery
 
Construction machinery is a potentially lucrative market for foreign firms. Indonesia casts its net far and wide when searching for quality machinery. Imports of large construction vehicles totalled $771 million during 2014 with goods from Japan amounting to $247 million. 
 
European and American firms also have a strong export presence. These accounted for $45.8 million of total imports – proving that distance is no barrier when it comes to Indonesia’s desire for top quality goods. 
Indeed, stone processing machinery is vital in a thriving construction environment such as Indonesia. 
 
Accordingly, the archipelago nation imported $669 million worth of these goods, while also importing building stone worth $72.8 million. German suppliers provided machinery worth $189 million – again proving there is no limit for Indonesia’s hunt for the very best building machinery and products.
 
Demand for stone processing materials and machinery should only increase in Indonesia. House building is very much a major focus for the government until at least 2020, so opportunities abound in this sector. 
 
Coupled with this is the multitude of infrastructure projects underway across the breadth of the country. New sea and airports are planned or already under construction. Railway links and motorways are seeing billions in investment levels. The market, then, is simply huge and will remain so for at least the next four to five years.
 
How can you make contacts in Indonesia’s building market?
 
Indonesia’s construction industry is a bountiful market for international suppliers across almost all related sectors. In order to get a real flavour for the market, and to get their products noticed by a hungry, rapidly growing industry, foreign firms need the ideal platform, which trade shows can offer.
 
IndoBuildTech Jakarta, is Indonesia’s leading building technology expo. Over 45,000 local and international visitors attend each year. It is the perfect place for foreign companies to show off their latest products, news and innovations to a highly interested audience. Learn more about the show today.
 

 


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Event20 Mar

Indobuildtech Ja..

20-24 March, 2019
INDONESIA

JAKARTA, INDONESIA
Venue: INDONESIA CONVENTION EXHIBITION CENTER (ICE)

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